If you’re a consumer, you probably applauded Apple’s decision to allow users to opt-out of tracking any company they connect with digitally. However, to date, Apple is one of the only companies to have enforced this strict rule in its security policies. These policies are intended to make those who use Apple devices safer and to choose which companies they want to collect personal data.
This is especially important when visiting new websites to ensure that they do not track your personal information unless you explicitly want to provide them with your data as needed.
Faced with Apple’s new security policy, the advertising industry wanted this to be presented as a secondary option, and not as an option that appears when you first access a new website or a new application. Indeed, the only way for them to send you advertising messages is to have your personal information via a cookie or any other means allowing personal data to be recorded for advertising purposes.
Apple resisted this call from many sites and the advertising industry, directly impacting search engines such as Google, Bing, etc. These search engines depend on cookies to track you and serve personalized advertisements.
On the other hand, there are many sites where I want to follow myself so that I can get information or even ads that may be of interest to me. This is especially true for news sites that I follow and services like Facebook, Pinterest, and others that I find interesting and want personalized data and ads.
While it’s clear that Apple’s no-tracking policy has had a significant impact on digital advertising, an example that emerged last week shows more clearly how Apple’s security policy can impact a company.
In a post in Payments.com Speaking about Snap’s weak sales growth last quarter, they shared the following insights and analysis:
In Snap’s earnings results announced Thursday (July 21), the social media company posted its weakest quarterly sales growth, where sales rose 13% year-on-year to $1.1 billion.
But looking beyond the deceleration in revenue growth, where years ago that metric had risen by triple-digit percentage points (and the compound annual growth rate, or CAGR, had been 50 %), lies a set of deeper pressures that served to send the shares crashing around 40% on Friday (July 22).
Yes, the company has decided to reduce its expenses. Yes, the digital advertising market is experiencing competition. But the steep drop and tens of billions of dollars in lost market capitalization that Bloomberg estimated was seen in sympathy across all platforms speaks to something bigger.
The key is that Apple has changed its privacy policies and therefore users can deny permission to be tracked.
During the Q&A session with analysts, Snap CFO Derek Andersen said, “The deceleration started with platform policy changes implemented in the third quarter of the year. last”. The changes impact the traditional models that are “used to generate the direct response to advertising activity, as well as the tools used to measure the returns of that direct response advertising.”
In the early 1990s, I had a discussion with a senior executive at a company who explained to me the importance of targeted ads. This discussion was long before the commercialization of the Internet, and Google was still just a Stanford research project for Larry Page and Sergey Brin. However, he was a very accomplished pilot and pointed out that the current advertising model was not working. He was referring to blind mail ads sent to people who had no interest in those mail ads. It was known as direct mail marketing, and before 1990 it was the dominant way advertisements were sent out in addition to appearing on television, magazines and newspapers.
He shared that as a pilot, if an advertisement had anything to do with aircraft, aircraft equipment, products and services, he immediately gravitated towards those advertisements and ignored others. At the time, I was an avid diver and had a similar experience because any information or publicity about diving was of great interest to me.
He then noted that the advertising market was broken and needed to be reinvented in our digital future.
Of course, he was 100% right, and in 1995, with the introduction of the World Wide Web and search engines, targeted advertising became a reality.
They first appeared in what were called banner ads and were relatively untargeted. But Google shook up the digital advertising market with new algorithms that looked for personal data about a person’s interests, and the digital advertising market took off.
Twenty-five years later, the World Wide Web has grown exponentially with billions of users accessing digital information on multiple devices, and conceptually each of them is a target for advertisements.
Until Apple made this move to give users more direct control over a person’s data, it took hard work to opt out of sharing their information on most sites. Now Apple forces the “do not track” option in advance, making it easier to prevent people’s information from being used to track them.
While this is painful for advertisers, it’s a welcome step forward for consumers who want more security and privacy in their digital lives.